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Walmart cuts profit forecasts, lures retailers McDonald’s rises on sales, earnings top estimates GE Raises Profits, Coca-Cola Raises Forecasts Indexes down: Dow 0.56%, S&P 1.17%, Nasdaq 1.83%
July 26 (Reuters) – U.S. stock indexes fell on Tuesday after Walmart’s profit warning fueled fears in the retailer that consumers are cutting discretionary spending in the face of decades-high inflation. Sign up now for FREE unlimited access to Reuters.com Register The S&P 500 consumer discretionary index (.SPLRCD) fell 3.2%, leading the sector decline. The S&P 500 retail index (.SPXRT) fell 3.9%. “There’s a general expectation that Walmart’s issues are symptomatic of the entire retail space,” said Chuck Lieberman, chief investment officer at Advisor Capital Management. “There’s no question that inflation is higher than people are comfortable with, and that’s likely to stay that way for a while.” Along with high inflation, a stronger dollar is also expected to weigh on the earnings of companies with extensive global operations. Wall Street’s main indexes have rallied from mid-June lows as falling commodity prices and weak economic data prompted investors to curb expectations of aggressive rate hikes by the Federal Reserve, but recession fears have receded recently. . The Fed is widely expected to raise interest rates by 75 basis points at the end of its two-day policy meeting on Wednesday, which will be followed by comments from Chairman Jerome Powell. US consumer confidence fell to a near 1-1/2-year low in July, data showed, pointing to a slowdown in economic growth at the start of the third quarter. read more Preliminary second-quarter GDP data on Thursday is likely to be negative after the US economy contracted in the first three months of the year. The International Monetary Fund, meanwhile, cut its forecast for global growth again, warning of risks from high inflation and the war in Ukraine. read more At 12:19 p.m. ET the Dow Jones industrial average (.DJI) was down 178.18 points, or 0.56%, at 31,811.86, the S&P 500 (.SPX) was down 46.24 points, or 1.17%, at 3,920 and the Nadsiteq index. .IXIC) fell by 215.17 points or 1.83%, to 11,567.50 points. Among the Dow components, Coca-Cola Co ( KO.N ) gained 1.6 percent after the company raised its full-year revenue forecast, while McDonald’s Corp ( MCD.N ) rose 2.6 percent after beating quarterly expectations. read more 3M Co ( MMM.N ) rose 6.4 percent after the industrial giant said it planned to spin off its healthcare business. read more General Electric Co ( GE.N ) gained 6.6 percent after the U.S. industrial group beat revenue and profit estimates, while General Motors Co ( GM.N ) fell 3.3 percent after reporting a 40 percent drop in quarterly net income. read more Apple Inc ( AAPL.O ), Netflix Inc ( NFLX.O ), Tesla Inc ( TSLA.O ) each fell about 1.5 percent, while Alphabet Inc ( GOOGL.O ) and Microsoft Corp ( MSFT .O) fell about 2.5% and 3.2%, respectively, ahead of their quarterly reports after the market closed. Earnings by S&P 500 companies are expected to have risen 6.2% for the second quarter from a year ago, according to data from Refinitiv. Declining issues outnumbered advancing ones by a ratio of 1.94 to 1 on the NYSE and by a ratio of 1.82 to 1 on the Nasdaq. The S&P index hit a new 52-week high and 30 new lows, while the Nasdaq hit 28 new highs and 103 new lows. Sign up now for FREE unlimited access to Reuters.com Register Reporting by Shreyashi Sanyal and Aniruddha Ghosh in Bengaluru. Edited by Arun Koyyur and Anil D’Silva Our Standards: The Thomson Reuters Trust Principles.
